There could be deepening conflict between Indigenous leadership seeking to preserve their culture and Indigenous politicians seeking to conserve their own power and expand their own political influence.

Europe Agrees on New Bailout to Help Greece Avoid Default (2)

Brussels - Greece finally secured its second giant bailout early Tuesday after euro zone finance ministers agreed to save it from bankruptcy in exchange for severe austerity measures and strict conditions.

After more than 13 hours of talks, the ministers approved a new bailout of 130 billion euros, or $172 billion, under which private investors in Greek debt will take even steeper losses than expected to help stave off the country’s imminent default.

“We have reached a far-reaching agreement on Greece’s new program and private-sector involvement,” Jean-Claude Juncker, the prime minister of Luxembourg, announced Tuesday morning.

The agreement could be a new turning point in the European debt crisis, which has raised questions about the viability of the euro itself.

Though the outcome had been predicted, the meeting in Brussels proved more grueling than expected as euro zone countries, the European Central Bank and the International Monetary Fund wrestled through the night over a discrepancy in the amount of Greece’s debt to be reduced.

Under the bailout terms, which were not finalized until after 5 a.m. on Tuesday, Greece will reduce its debt to about 120.5 percent of its gross domestic product by 2020, from about 160 percent now. Achieving a deal with that goal proved difficult because the steady deterioration of public finances in Athens has left the country’s creditors with problems in making the figures for the new bailout add up.

After several rounds of tough talks, representatives of banks that hold Greek bonds, who had agreed in October to take a 50 percent loss on the face value of their bonds, agreed to take a 53.5 percent loss, the equivalent to an overall loss of around 75 percent.

Meanwhile Greece will pay lower interest rates on its bailout loans, and the European Central Bank agreed to give up profits from Greek bonds bought at a discount and to pass those gains back to the government in Athens. This will be done via euro zone member countries because of the Central Bank’s regulations.

Stricter rules on euro zone debt and budget deficits are already in place, and next week European leaders are expected to agree on a new, higher firewall for euro bloc countries that get into financial trouble, a step that policy makers hope will signal the beginning of the end of the crisis.

The talks on Monday addressed the firewall issue, though only briefly. A new, permanent fund of 500 billion euros, or $660 billion, called the European Stability Mechanism, is due to come into existence in July, and one way of bolstering its power would be to run it alongside the current, temporary, rescue fund, the European Financial Stability Facility.

The bailout, with a stronger firewall, could provide the euro zone with some much-needed momentum. The injection of liquidity into the banking sector by the European Central Bank late last year — with the tacit support of Germany — had started to convince critics that there was a determination to save the currency.

Yet only last week the Greek bailout appeared to hang in the balance when rumors circulated that Germany’s finance minister, Wolfgang Schäuble, was willing to contemplate a Greek default. As tempers flared, the Greek finance minister, Evangelos Venizelos, suggested that some people were trying to drive his country out of the euro zone, and the Greek president, Karolos Papoulias, accused Mr. Schäuble of insulting the country.

It remains unclear whether a default was contemplated seriously or merely floated as a means of pressuring Athens.

Nevertheless, the episode underlines the extent to which Greece remains a weak spot for the 17 European Union countries that use the euro. This would be the second major bailout for Greece in two years. In May 2010, European governments and the International Monetary Fund put together the first three-year bailout package of 110 billion euros, then worth about $146 billion, not all of which has been used.

Doubts persist about Greece’s ability to carry out the tough austerity measures pushed through Parliament or to manage the weakened economy.

Those long-term fears deepened with the leak of an official report from the European Commission, European Central Bank and the International Monetary Fund that said that if changes were not made, Greek debt could remain at 160 percent of gross domestic product in 2020. It also suggested that more help would be needed after the period covered by the bailout being negotiated. That could amount to $66 billion more from 2015 to 2020.

Under the new bailout deal there will be permanent European team monitoring of Greece’s implementation of the austerity measures. Money paid to the government in Athens will be directed into a special “segregated” account that will prioritize debt repayment.

“We expect that this unprecedented solidarity of Greece’s euro area partners is matched by a strong commitment by Greece’s political leaders to truly implement the program,” said Olli Rehn, European Commissioner for Economic and Monetary Affairs.

Asked about the I.M.F’s contribution to the bailout, its chief, Christine Lagarde, said that a decision on this would be made by its board and would depend in part on how much progress the euro zone makes in building up its new firewall.

Meanwhile in a statement the Institute of International Finance, which represents many of the banks holding Greek bonds said that the agreement “would contribute to the broader efforts of the Euro Area to resolve sovereign debt problems while supporting global growth and financial stability.”

According to a detailed agreement for the bailout, Greece will make big spending cuts, including reducing pharmaceutical expenditures by more than $1.3 billion in 2012 through increased use of generic medicine, cutting overtime pay for hospital doctors by at least $66 million, saving $396 million in military procurement and saving nearly $40 million by reducing the number of deputy mayors and their staffs.

The 50-page agreement also lays out in detail the changes to be made to Greece’s notoriously weak tax-collection system.

The second bailout was first promised in October, but agreement has been delayed as international creditors have pressed for more concessions and stricter controls on Greece’s government.

Critics, who suspected that Greece was banking on the euro zone’s desire to avert a default, accused the government of stalling on essential economic measures.

Meanwhile, the government in Athens, led by Prime Minister Lucas D. Papademos, has had to cope with mounting opposition to austerity measures. Mr. Papademos, who attended Monday’s meeting, told ministers that there was enough political backing in Greece to allow the fulfillment of new austerity measures accompanying a second loan deal, an official in his office said.

Mr. Papademos noted that the measures had been voted into law by two-thirds of the country’s Parliament and that the government’s two coalition parties had backed the changes. He added that the majority of Greeks wanted the country to remain in the euro zone.

Antonis Samaras of the conservative New Democracy party, widely expected to lead the next Greek government, described the deal as “positive and significant,” noting that it safeguarded the country’s solvency and future in Europe while also paving the way for early elections, expected in April.

“The country has bought time and opened a window of hope,” Mr. Samaras said in comments aired on Greek television from Cyprus where he was on an official visit. “But in a Greece that is hurting and with a people that is suffering, it is no time for celebration.”

The former premier and Socialist party leader George Papandreou said the agreement meant “the sacrifices of the Greek people will not only not have been in vain, but will pay off.”

At a news conference in Brussels on Tuesday morning, Prime Minister Papademos described it as “a historic decision,” noting that the agreement would allow the country to “move forward with stability, to reduce uncertainty and boost trust in the Greek economy in order to create better conditions.”

“The new program has characteristics that will contribute to improving competitiveness and to creating conditions that will boost growth at a steady rate,” he said. He stressed that measures pledged by Greece must be implemented. “We don’t have the luxury of delaying implementation. If we fail to do this, then once again we will face financial deadlock in the future and that is not permissible.”

Mr. Venizelos, the finance minister, also expressed satisfaction. “Fortunately we reached a positive outcome, which was neither easy nor a foregone conclusion.”

Mr. Venizelos said that Greek citizens could now feel safer. “As of today, we have a new level of security and certainty and we can regain our enthusiasm,” he said, appealing to Greeks who have withdrawn their savings from banks to put them back. “This is a national appeal, not only to those who have taken their money abroad but those who have been keeping it at home,” Mr. Venizelos said.

Even politicians from the triple-A rated countries in Europe seemed ready on Monday to give Greek politicians some credit. In Helsinki, the Finnish finance minister, Jutta Urpilainen, said that Greece had done what had been asked of it, Reuters reported.

Europe Agrees on New Bailout to Help Greece Avoid Default (2)

Brussels - Greece finally secured its second giant bailout early Tuesday after euro zone finance ministers agreed to save it from bankruptcy in exchange for severe austerity measures and strict conditions.

After more than 13 hours of talks, the ministers approved a new bailout of 130 billion euros, or $172 billion, under which private investors in Greek debt will take even steeper losses than expected to help stave off the country’s imminent default.

“We have reached a far-reaching agreement on Greece’s new program and private-sector involvement,” Jean-Claude Juncker, the prime minister of Luxembourg, announced Tuesday morning.

The agreement could be a new turning point in the European debt crisis, which has raised questions about the viability of the euro itself.

Though the outcome had been predicted, the meeting in Brussels proved more grueling than expected as euro zone countries, the European Central Bank and the International Monetary Fund wrestled through the night over a discrepancy in the amount of Greece’s debt to be reduced.

Under the bailout terms, which were not finalized until after 5 a.m. on Tuesday, Greece will reduce its debt to about 120.5 percent of its gross domestic product by 2020, from about 160 percent now. Achieving a deal with that goal proved difficult because the steady deterioration of public finances in Athens has left the country’s creditors with problems in making the figures for the new bailout add up.

After several rounds of tough talks, representatives of banks that hold Greek bonds, who had agreed in October to take a 50 percent loss on the face value of their bonds, agreed to take a 53.5 percent loss, the equivalent to an overall loss of around 75 percent.

Meanwhile Greece will pay lower interest rates on its bailout loans, and the European Central Bank agreed to give up profits from Greek bonds bought at a discount and to pass those gains back to the government in Athens. This will be done via euro zone member countries because of the Central Bank’s regulations.

Stricter rules on euro zone debt and budget deficits are already in place, and next week European leaders are expected to agree on a new, higher firewall for euro bloc countries that get into financial trouble, a step that policy makers hope will signal the beginning of the end of the crisis.

The talks on Monday addressed the firewall issue, though only briefly. A new, permanent fund of 500 billion euros, or $660 billion, called the European Stability Mechanism, is due to come into existence in July, and one way of bolstering its power would be to run it alongside the current, temporary, rescue fund, the European Financial Stability Facility.

The bailout, with a stronger firewall, could provide the euro zone with some much-needed momentum. The injection of liquidity into the banking sector by the European Central Bank late last year — with the tacit support of Germany — had started to convince critics that there was a determination to save the currency.

Yet only last week the Greek bailout appeared to hang in the balance when rumors circulated that Germany’s finance minister, Wolfgang Schäuble, was willing to contemplate a Greek default. As tempers flared, the Greek finance minister, Evangelos Venizelos, suggested that some people were trying to drive his country out of the euro zone, and the Greek president, Karolos Papoulias, accused Mr. Schäuble of insulting the country.

It remains unclear whether a default was contemplated seriously or merely floated as a means of pressuring Athens.

Nevertheless, the episode underlines the extent to which Greece remains a weak spot for the 17 European Union countries that use the euro. This would be the second major bailout for Greece in two years. In May 2010, European governments and the International Monetary Fund put together the first three-year bailout package of 110 billion euros, then worth about $146 billion, not all of which has been used.

Doubts persist about Greece’s ability to carry out the tough austerity measures pushed through Parliament or to manage the weakened economy.

Those long-term fears deepened with the leak of an official report from the European Commission, European Central Bank and the International Monetary Fund that said that if changes were not made, Greek debt could remain at 160 percent of gross domestic product in 2020. It also suggested that more help would be needed after the period covered by the bailout being negotiated. That could amount to $66 billion more from 2015 to 2020.

Under the new bailout deal there will be permanent European team monitoring of Greece’s implementation of the austerity measures. Money paid to the government in Athens will be directed into a special “segregated” account that will prioritize debt repayment.

“We expect that this unprecedented solidarity of Greece’s euro area partners is matched by a strong commitment by Greece’s political leaders to truly implement the program,” said Olli Rehn, European Commissioner for Economic and Monetary Affairs.

Asked about the I.M.F’s contribution to the bailout, its chief, Christine Lagarde, said that a decision on this would be made by its board and would depend in part on how much progress the euro zone makes in building up its new firewall.

Meanwhile in a statement the Institute of International Finance, which represents many of the banks holding Greek bonds said that the agreement “would contribute to the broader efforts of the Euro Area to resolve sovereign debt problems while supporting global growth and financial stability.”

According to a detailed agreement for the bailout, Greece will make big spending cuts, including reducing pharmaceutical expenditures by more than $1.3 billion in 2012 through increased use of generic medicine, cutting overtime pay for hospital doctors by at least $66 million, saving $396 million in military procurement and saving nearly $40 million by reducing the number of deputy mayors and their staffs.

The 50-page agreement also lays out in detail the changes to be made to Greece’s notoriously weak tax-collection system.

The second bailout was first promised in October, but agreement has been delayed as international creditors have pressed for more concessions and stricter controls on Greece’s government.

Critics, who suspected that Greece was banking on the euro zone’s desire to avert a default, accused the government of stalling on essential economic measures.

Meanwhile, the government in Athens, led by Prime Minister Lucas D. Papademos, has had to cope with mounting opposition to austerity measures. Mr. Papademos, who attended Monday’s meeting, told ministers that there was enough political backing in Greece to allow the fulfillment of new austerity measures accompanying a second loan deal, an official in his office said.

Mr. Papademos noted that the measures had been voted into law by two-thirds of the country’s Parliament and that the government’s two coalition parties had backed the changes. He added that the majority of Greeks wanted the country to remain in the euro zone.

Antonis Samaras of the conservative New Democracy party, widely expected to lead the next Greek government, described the deal as “positive and significant,” noting that it safeguarded the country’s solvency and future in Europe while also paving the way for early elections, expected in April.

“The country has bought time and opened a window of hope,” Mr. Samaras said in comments aired on Greek television from Cyprus where he was on an official visit. “But in a Greece that is hurting and with a people that is suffering, it is no time for celebration.”

The former premier and Socialist party leader George Papandreou said the agreement meant “the sacrifices of the Greek people will not only not have been in vain, but will pay off.”

At a news conference in Brussels on Tuesday morning, Prime Minister Papademos described it as “a historic decision,” noting that the agreement would allow the country to “move forward with stability, to reduce uncertainty and boost trust in the Greek economy in order to create better conditions.”

“The new program has characteristics that will contribute to improving competitiveness and to creating conditions that will boost growth at a steady rate,” he said. He stressed that measures pledged by Greece must be implemented. “We don’t have the luxury of delaying implementation. If we fail to do this, then once again we will face financial deadlock in the future and that is not permissible.”

Mr. Venizelos, the finance minister, also expressed satisfaction. “Fortunately we reached a positive outcome, which was neither easy nor a foregone conclusion.”

Mr. Venizelos said that Greek citizens could now feel safer. “As of today, we have a new level of security and certainty and we can regain our enthusiasm,” he said, appealing to Greeks who have withdrawn their savings from banks to put them back. “This is a national appeal, not only to those who have taken their money abroad but those who have been keeping it at home,” Mr. Venizelos said.

Even politicians from the triple-A rated countries in Europe seemed ready on Monday to give Greek politicians some credit. In Helsinki, the Finnish finance minister, Jutta Urpilainen, said that Greece had done what had been asked of it, Reuters reported.